Wells Fargo Profit for Q2 Surges 57% on Higher Interest Income from Customers

Wells Fargo's profit surged 57% in the second quarter as it earned more in interest payments from customers and raised its forecast for 2023 net interest income, sending its shares up nearly 4% higher in premarket trading.

Its net interest income climbed 29% to $13.16 billion as banks raised their borrowing costs following a series of rate hikes by the Federal Reserve to tame inflation.

The fourth largest U.S. lender said 2023 net interest income (NII) is expected to be about 14% higher than last year's $45 billion. It had earlier forecast a 10% rise in NII.

Fed Chair Jerome Powell signaled late last month that the central bank will likely resume its rate-hike campaign after leaving the policy rate unchanged in June.

"The U.S. economy continues to perform better than many had expected, and although there will likely be continued economic slowing and uncertainty remains, it is quite possible the range of scenarios will narrow over the next few quarters," said CEO Charlie Scharf.

Wells Fargo set aside $1.71 billion in provisions for credit losses in the second quarter, compared with $580 million a year ago.

Net income rose to $4.94 billion, or $1.25 per share, for the three months ended June 30, compared with $3.14 billion, or $0.75 per share, a year earlier, the lender said on Friday.

(Source: Reuters)